Thomas v. Countrywide Home Loans, Inc.

Filing 19

MEMORANDUM OPINION AND ORDER directing that Countrywide's 13 Motion to Stay Remand Order to Require Stipulation on Behalf of Putative Class Members or, in the Alternative, a Stipulation from Putative Class Members Currently Represented by Coun sel for Plaintiff is DENIED; further ORDERED that this action is REMANDED to the Circuit Court of Macon County, Alabama; the Clerk of the Court is DIRECTED to take appropriate steps to effectuate the remand. Signed by Chief Judge William Keith Watkins on 4/10/12. (Certified copy of this Order sent via CMRRR to Macon County Circuit Court Clerk.)(scn, )

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
EASTERN DIVISION
CELESTINE THOMAS, on behalf
of herself and all other similarly
Alabama residents,
Plaintiff,
v.
COUNTRYWIDE HOME LOANS,
Defendant.

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CASE NO. 3:11-CV-399-WKW

MEMORANDUM OPINION AND ORDER
Before the court is Defendant Countrywide Home Loans’ Motion to Stay
Remand Order to Require Stipulation on Behalf of Putative Class Members or, in the
Alternative, a Stipulation from Putative Class Members Currently Represented by
Counsel for Plaintiff. (Doc. # 13.) The motion has been fully briefed and is due to
be denied.
I. BACKGROUND
Sometime back, Defendant Countrywide Home Loans removed this action
under the jurisdictional provisions of the Class Action Fairness Act of 2005
(“CAFA”), 28 U.S.C. § 1711 et seq., and 28 U.S.C. § 1332(d)(2). As grounds for
removal, Countrywide asserted that the monetary claims of the putative class
exceeded $5 million in the aggregate. Alternatively, Countrywide contended that Ms.

Thomas’s individual action satisfied § 1332(a)’s amount in controversy requirement,
and, thus, 28 U.S.C. § 1367 authorized supplemental jurisdiction over the prospective
class plaintiffs’ claims that did not exceed $75,000. Ms. Thomas moved to remand
this action, and the heat of the remand battle focused on the amount in controversy.
Specifically, to defeat CAFA jurisdiction, Ms. Thomas relied upon the stipulation in
her complaint that the aggregate amount in controversy was less than $5 million and
argued in her brief that she was not seeking to recover more than $74,999 on her
individual claims.
In an Order entered on February 17, 2012, and after full briefing, the court
conditionally granted Ms. Thomas’s motion to remand. Part III A of the opinion
found that CAFA’s $5 million amount in controversy requirement was not satisfied.
Part III B required Ms. Thomas to submit the affidavit that she had discussed in her
brief, but that she had neglected to file. Specifically, in Part III B, the court found
that an affidavit from Ms. Thomas clarifying that at the time of removal, the amount
in controversy did not exceed $75,000 and specifically binding her to a recovery less
than § 1332(a)’s amount in controversy would necessitate remand on this record.
Immediately after the February 17 Order was entered, Countrywide filed the
instant motion to stay the remand and argued that Ms. Thomas also should be
required to file a stipulation on behalf of all putative class members that no individual
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class member would seek or accept damages in excess of $75,000. Countrywide
argued that a stipulation limited to Ms. Thomas’s claims would be “insufficient to
guarantee that federal subject matter jurisdiction does not exist in this action.” (Doc.
# 13, at 2–3.) Countrywide’s position now is that § 1332(a) also would be satisfied
if the amount in controversy as to any putative class member’s claims exceeded
$75,000.
Briefing on Countrywide’s motion was ordered, and the parties were informed
that no action would be taken by the court on the motion to remand until briefing
closed on the motion to stay. In her brief, Ms. Thomas argued that Countrywide’s
argument comes too late as it was raised for the first time in the motion to stay the
remand, but that, in any event, the claims of putative class members may not be
considered in determining whether § 1332(a)’s amount in controversy requirement
is satisfied. Ms. Thomas contended that a court must examine only whether any
named plaintiff independently satisfies the amount in controversy requirement. Ms.
Thomas also filed an affidavit, attesting that her individual claims are limited to an
amount below $75,000, that this limitation governed at the time of removal, that she
would not amend her complaint to seek more, and that she would not accept more
than $74,999 on a favorable jury verdict.

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II. DISCUSSION
At the time of removal, Countrywide’s position was that once diversity
jurisdiction was established over the claims of Ms. Thomas (the only named
Plaintiff), § 1367 permitted the exercise of jurisdiction over the putative class
plaintiffs, even if those plaintiffs failed to satisfy the amount in controversy
requirement. Countrywide now raises a new argument that § 1332(a) also would be
satisfied if any unnamed, putative class member independently satisfied the amount
in controversy requirement; hence, according to Countrywide, a stipulation capping
the amount in controversy of the individual claims of the putative class members is
required for remand.
The issue of whether the claims of unnamed putative class members can be
used to establish § 1332(a)’s jurisdictional threshold was raised for the first time after
the court conditionally granted the motion to remand. Its untimeliness aside,
Countrywide’s argument is not persuasive. Assuming without deciding that the
amount in controversy could be satisfied by the claims of unnamed class members,1
Countrywide has not established its burden on removal. There is no discussion or
evidence demonstrating that the amount in controversy as to any other potential, but
unnamed, class plaintiff would more likely than not exceed $75,000. The evidence
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This Order should not be interpreted as expressing an opinion either way on this issue.
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is limited. Specifically, there is evidence that Countrywide entered into mortgage
loan agreements with approximately 5,275 Alabama residents (i.e., the putative class),
and that the average amount charged by Countrywide for origination fees and
discount points was, at a minimum, $981. (John Truong Aff. ¶¶ 4–5.) While Mr.
Truong attests that many of these Alabama individuals were charged additional fees
at closing, the amount of those fees is not mentioned.
Countrywide has not submitted evidence from which it can be found that the
fees of the putative class members come close to exceeding $75,000, or that another
basis exists by which to value the claims. This case is distinguishable, therefore, from
Chapman Funeral Home, Inc. v. National Linen Service, 178 F. Supp. 2d 1247 (M.D.
Ala. 2002), upon which Countrywide relies for its argument that a removing
defendant may establish § 1332(a)’s jurisdictional requirement by relying upon the
claims of putative class members.2 In Chapman, the removing defendant submitted
evidence identifying two putative class members and establishing that the value of
the injunctive relief to these two putative class members – the cessation of a monthly,
$3,000 charge for the remaining life of the contracts – easily surpassed the $75,000

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But see Eufaula Drugs, Inc. v. Tmesys, Inc., 432 F. Supp. 2d 1240 (M.D. Ala. 2006)
(finding that claims by proposed class members could not be used to satisfy the jurisdictional
requirement on removal and distinguishing Chapman based upon subsequently decided
authority).
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mark. See id. at 1249. Countrywide has failed to prove by a preponderance of the
evidence that the amount in controversy as to any putative class plaintiff more likely
than not exceeds the jurisdictional requirement. Additionally, based upon Ms.
Thomas’s affidavit, the court finds that Countrywide has failed to demonstrate by a
preponderance of the evidence that Ms. Thomas’s individual claims meet the
jurisdictional amount.
III. CONCLUSION
Based upon the foregoing authority, the requisite amount in controversy for
diversity cases has not been satisfied in this action, and the court lacks diversity
jurisdiction. Accordingly, it is ORDERED that Countrywide’s Motion to Stay
Remand Order to Require Stipulation on Behalf of Putative Class Members or, in the
Alternative, a Stipulation from Putative Class Members Currently Represented by
Counsel for Plaintiff (Doc. # 13) is DENIED.
It is further ORDERED that this action is REMANDED to the Circuit Court
of Macon County, Alabama.
The Clerk of the Court is DIRECTED to take appropriate steps to effectuate the
remand.

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DONE this 10th day of April, 2012.
/s/ W. Keith Watkins
CHIEF UNITED STATES DISTRICT JUDGE

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